Retirement plans are vital and significant investments especially when financial productivity, safety and stability is your main goal during your golden years. Even before you retire, you have numerous ways to use and maximize your retirement plan especially if you opt to establish the Individual 401k. Also known as the Solo 401k retirement plan, this is your best option if you want to get more out of your retirement savings.
What are Individual 401 k Plans?
To learn more about the best retirement plan today, it is essential to know the basics of Individual 401 k plans. Sense Financial is the top provider and administrator of this lucrative and remarkable retirement option for qualified individuals. Here are some of the must-knows about the Solo 401 k:
In order to become eligible and establish an Owner-Only retirement plan or Individual 401 k plans, you need to comply with two main requirements. First, you have to provide proofs of self-employment which means you can be a full-time employee of another company but have a self-employed business. If in any case you are an employed individual, you have to be an independent contractor or consultant only. Second, you need to show proofs of small business ownership. This means your company has no full-time employees except for you and your spouse.
The 401 k contribution limits
As of fiscal year 2013, the maximum salary deferral contribution of the Solo 401k plan is valued $17,500 for those who are under 50 years old. For plan owners who are 50 years old and above, they can increase their salary deferral contribution with $5,500 catch up contribution to make their total limit $23,000. Moreover, plan owners could also have additional 25% contribution as profit-sharing component. The combined maximum contribution could not exceed a total of $56,500 per year inclusive of the applicable catch-up add-ons for qualified contributors.
The 401k benefits
When it comes to benefits and privileges, the Individual 401k has overflowing offers. First, it guarantees one of the biggest maximum contributions. You have plenty of investment options to choose from where you can use your savings to boost your money. You are your own account trustee which means no hiring of custodian. Although not recommended at all times, you can also borrow from your savings in case you badly needed the money.
With remarkable features and lucrative guarantee, the Individual 401k retirement plan is a no-brainer when it comes to investing for your future.